Florida Regulations 12D-5.011: Assessment of Oil, Mineral and Other Subsurface Rights
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(1) All oil, mineral, gas, and other subsurface rights in and to real property, which have been sold or otherwise transferred by the owner of the real property, or retained or acquired through reservation or otherwise, shall be appraised and taxed separately from the fee or other interest in the fee. This tax is against those who benefit from the possession of the subsurface rights. When such subsurface rights are leased, the tax burden falls on the lessee, not on the lessor who owns the rights outright in perpetuity.
(a) When the subsurface rights in land have been transferred by the fee owner, or retained or acquired by other than the surface owner, it is the duty of the property appraiser to use reasonable means to determine the name of the record title owner from the public records of the county.
(b) When subsurface rights have been separated from the fee, the property appraiser shall make a separate entry on the assessment roll indicating the assessment of the subsurface rights which have been separated from the fee. The property appraiser may describe and enter these subsurface rights on the roll in the same manner in which they were conveyed. This entry shall immediately follow, in the same section, township, and range, the entry listing the record title owner of the surface fee insofar as is practicable.
(2) At the request of a real property owner who also owns the oil, mineral, and other subsurface rights to the same property, the property appraiser shall assess the subsurface rights separately from the remainder of the real estate. Such request shall be filed with the property appraiser on or before April 1. Failure to do so relieves the appraiser of the duty to assess subsurface rights separately from the remainder of the real estate owned by the owner of such subsurface rights.
(3) All subsurface rights are to be assessed on the basis of just value. The combined value of the subsurface rights, the undisposed subsurface interests, and the remaining surface interests shall not exceed the full just value of the fee title of the land inclusive of such subsurface rights.
(a) Any fractional subsurface interest in a parcel must be assessed against the entire parcel, not against a fraction of the parcel. For example, a one-fourth interest in the subsurface rights on 40 acres is assessed as a fractional interest on the entire 40 acres, not as an interest on 10 acres.
(b) Just value, or fair market value, of subsurface rights may be determined by comparable sales. In determining the value of such subsurface rights, the property appraiser may apply the methods provided by law, including consideration of the amounts paid for mineral, oil, and other subsurface rights in the area as reflected by the public records.
(c) The cost approach to value may be used to determine the assessed value of a mineral or subsurface right. Where comparable sales or market information is unavailable, and the lease transaction is reasonably contemporary, arm’s length, and the contract rent appears to reflect market value, the property appraiser may consider the total value of the contract and discount it to present value as a means of determining just value.
(4) At such time as all mineral assets shall be deemed depleted under present technology or upon a final decree by a court or action or ruling by a quasi-judicial body of competent jurisdiction ordering that no further extraction of minerals will be permitted, the property appraiser shall reduce the assessment of such subsurface rights in accordance with existing circumstances. However, as long as such interests remain, they shall continue to be separately assessed.
(5) Insofar as they may be applied, statutes and regulations not conflicting with the provisions of this chapter pertaining to the assessment and collection of ad valorem taxes on real property, shall apply to the separate assessment and taxation of subsurface rights.
Rulemaking Authority Florida Statutes § 195.027(1), 213.06(1) FS. Law Implemented 193.052, 193.062, 193.114(2), 193.481 FS. History-New 2-10-82, Formerly 12D-5.11.
Terms Used In Florida Regulations 12D-5.011
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Contract: A legal written agreement that becomes binding when signed.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
(b) When subsurface rights have been separated from the fee, the property appraiser shall make a separate entry on the assessment roll indicating the assessment of the subsurface rights which have been separated from the fee. The property appraiser may describe and enter these subsurface rights on the roll in the same manner in which they were conveyed. This entry shall immediately follow, in the same section, township, and range, the entry listing the record title owner of the surface fee insofar as is practicable.
(2) At the request of a real property owner who also owns the oil, mineral, and other subsurface rights to the same property, the property appraiser shall assess the subsurface rights separately from the remainder of the real estate. Such request shall be filed with the property appraiser on or before April 1. Failure to do so relieves the appraiser of the duty to assess subsurface rights separately from the remainder of the real estate owned by the owner of such subsurface rights.
(3) All subsurface rights are to be assessed on the basis of just value. The combined value of the subsurface rights, the undisposed subsurface interests, and the remaining surface interests shall not exceed the full just value of the fee title of the land inclusive of such subsurface rights.
(a) Any fractional subsurface interest in a parcel must be assessed against the entire parcel, not against a fraction of the parcel. For example, a one-fourth interest in the subsurface rights on 40 acres is assessed as a fractional interest on the entire 40 acres, not as an interest on 10 acres.
(b) Just value, or fair market value, of subsurface rights may be determined by comparable sales. In determining the value of such subsurface rights, the property appraiser may apply the methods provided by law, including consideration of the amounts paid for mineral, oil, and other subsurface rights in the area as reflected by the public records.
(c) The cost approach to value may be used to determine the assessed value of a mineral or subsurface right. Where comparable sales or market information is unavailable, and the lease transaction is reasonably contemporary, arm’s length, and the contract rent appears to reflect market value, the property appraiser may consider the total value of the contract and discount it to present value as a means of determining just value.
(4) At such time as all mineral assets shall be deemed depleted under present technology or upon a final decree by a court or action or ruling by a quasi-judicial body of competent jurisdiction ordering that no further extraction of minerals will be permitted, the property appraiser shall reduce the assessment of such subsurface rights in accordance with existing circumstances. However, as long as such interests remain, they shall continue to be separately assessed.
(5) Insofar as they may be applied, statutes and regulations not conflicting with the provisions of this chapter pertaining to the assessment and collection of ad valorem taxes on real property, shall apply to the separate assessment and taxation of subsurface rights.
Rulemaking Authority Florida Statutes § 195.027(1), 213.06(1) FS. Law Implemented 193.052, 193.062, 193.114(2), 193.481 FS. History-New 2-10-82, Formerly 12D-5.11.